Costco just passed Kroger in US grocery market share as shoppers chase deals

Inflation is pinching household budgets across the country on gas, housing, and insurance, and shoppers are changing where they buy food. Costco, the massive warehouse store chain, just overtook Kroger, the supermarket chain with nearly 2,800 stores, in US retail food and beverage sales, according to Business Insider.

Data from consumer analytics firm Numerator shows Costco climbed to 8.4 percent of the market, a half percentage point higher than last year. Walmart, the discount retail giant, grew its dominant lead by 0.2 points to capture 20.3 percent of all grocery spending.

Meanwhile, traditional grocers are losing ground as shoppers look for every possible way to cut costs. Kroger saw its share slip to 8.2 percent, and Albertsons, the grocery store chain operating 2,200 stores, dropped to 4.5 percent. Rising costs from global trade pressures are forcing every supermarket chain to rethink how it prices items on the shelf.

Deutsche Bank, the global investment bank, warned that Walmart is bracing for higher diesel and transportation costs that could wipe out savings from tariff refunds. But when Walmart raises prices, its competitors follow while Walmart stays the cheapest option on the block.

Kroger is fighting back by hiring Greg Foran, who previously ran Walmart's US business, to lead a $5 billion turnaround that includes corporate job cuts and a hard bargain with suppliers. Albertsons is also trimming its employee benefits package to handle surging healthcare costs.

For your weekly grocery run, the shifting landscape means the biggest warehouse clubs are holding the line on prices while traditional supermarkets scramble to catch up.

Photo: Coolcaesar, CC BY-SA 4.0, via Wikimedia Commons